RSP Permian Q4 Results

[dan_s]

RSPP's Q4 production and Adjusted Earnings came in slightly below my forecast.

Highlights for the Fourth Quarter and Full Year 2017 :
• 4Q17 production increased 74% to 62.4 MBoe/d (71% oil, 88% liquids) compared to 4Q16 and full year 2017 production increased 89% to 55.3 MBoe/d (72% oil, 88% liquids) compared to 2016
• 4Q17 net income was $140.8 million, or $0.89 per diluted share and adjusted net income (non-GAAP), which does not include certain items, was $50.1 million, or $0.32 per diluted share. Full year 2017 net income was $232.1 million, or $1.49 per diluted share and adjusted net income (non-GAAP), which does not include certain items, was $128.6 million, or $0.83 per diluted share
• 4Q17 adjusted EBITDAX (non-GAAP) increased 102% to $182.4 million compared to 4Q16, and increased 26% compared to 3Q17. Full year 2017 adjusted EBITDAX (non-GAAP) increased 134% to $587.0 million compared to 2016
• Full year 2017 development capital expenditures of $673.3 million
• Maintained strong year-end liquidity position of $561.2 million, including $523.1 million of available borrowing capacity under the Company's revolving credit facility and $38.1 million of cash
• Proved reserves increased by 59% to 376 MMBoe (70% oil, 87% liquids) compared to 2016; achieved low drill-bit finding and development cost of $6.26/Boe, with a 771% reserve replacement ratio and a 536% organic reserve replacement ratio

2018 Guidance and 2019-2020 Preliminary Outlook
• Average net daily production range of 72.0 - 78.0 MBoe/d in 2018, a 30% - 41% increase over 2017
• Expect to generate cash flow in excess of development spending by the fourth quarter of 2018, with Net Debt / LTM EBITDAX of 2.0x or less by year-end at a $50 average oil price
• Development capital expenditure range of $815 - $895 million (drilling, completion, infrastructure and other) with drilling and completion of $725 - $785 million and infrastructure and other of $90 - $110 million
• Expanded hedge profile covering approximately 60% of 2018E oil production volumes at the midpoint
• Expecting 30%-plus annual production growth in 2019 and 2020 with substantial free cash flow generated at a $50 oil price

Steve Gray, Chief Executive Officer, commented, "I am proud of our Company's accomplishments in 2017. We delivered on our annual guidance objectives while nearly doubling the size of the Company, integrating a new operating area in the Delaware Basin and building out the infrastructure and team to accommodate our increased activity levels and production growth in 2018. We continue to see impressive well results in both our Midland and Delaware Basin assets and this increased well productivity enabled us to meet the mid-point of our production guidance despite completing twenty fewer horizontal wells than we originally budgeted.

"We are well positioned for strong returns in 2018 as we continue to increase our capital efficiency levels and accelerate the completion of our drilled but uncompleted wells carried over from last year's drilling program. We also expect to generate cash flow in excess of our development spending by the fourth quarter of 2018 while growing production 35% at the mid-point of our guidance."

[dan_s]

In the last 3 months, 14 ranked analysts set 12-month price targets for RSPP. The average price target among the analysts is $51.12. Price targets range from $46 to $55. Three of the five most recent forecasts submitted to Reuters have price targets of $55.

RSPP closed at $40.04 on March 2.